Kiwi E-Commerce Powers Through Blackout

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Kiwi E-Commerce Powers Through Blackout

A power outage that has left the central business district of Auckland, New Zealand, without electricity since 21 February is proving a textbook case in the fragility of critical infrastructure - and the endurance of information-based commerce.

"It's been a fascinating exercise for businesses with infrastructure that don't need to be centralized," said Ralph Brayham, country manager for Toshiba's New Zealand computer products division.

"Networks stayed up," said Brayham.

The New Zealand Stock Exchange (NZSE) and many of the country's banks, insurance companies, and accounting firms have headquarters in the 30-square-block area affected by the ongoing outage. Almost all of those businesses have been relocated to offices in Auckland's suburbs, or buildings in other cities. In many cases, individual workers have simply been sent home with laptop computers, Brayham said.

Mercury Energy, the electricity provider in question, had initially promised partial power restoration for today, but technical problems have slowed progress. The company said some parts of the district will remain dark for up to three weeks.

Still, the country's economy churns on, unabated.

"As far as continuity of trading is concerned, our member firms have an arrangement for a secondary trading site," said Wayne Zander, manager of information systems for the New Zealand Stock Exchange. "That was all restored well before opening trade [last] Monday morning."

The district first lost power on Saturday, 21 February, when the last of four main cables that supply power to the area failed, after dropping one by one over a period of weeks. Mercury Energy has accepted responsibility for the blackout, but the exact reason that numerous redundant systems failed is unclear. The company is expected to be the subject of an independent inquiry.

Several Internet service providers (ISPs) were affected, but most only briefly. A main hub for Netlink, the country's leading national service provider, was in the blackout zone, but connectivity was restored to ISPs and business customers within 24 hours, according to marketing manager Don Guthrie.

New Zealand's main Internet links to US and Australia backbones are in Hamilton, another city, and were unaffected by the outage.

Despite the blackout, it's largely been business as usual for banks and other companies that trade in bits, because of the distributed nature of their networks, and the fact that most computing infrastructure is far more portable than it was even five years ago, Brayham said.

"You can unplug a router and NT server and move them and plug them back in and they basically work - unlike five years ago, where it was a real pain in the ass to move that kind of stuff," Brayham said.

Phil Gouge, director of Auckland ISP Clearview, said Auckland's central business district has been all-but abandoned. "Large companies have their employees networking from home," he said. "And New Zealand has a high proportion of cellphone users, so that's been good."

Auckland's real economic casualties have proven to be retail stores and restaurants in the darkened district. Those shops depend on walk-in customers, but the area has been deserted for more than a week.

"Retail stores are probably the big losers," said Netlink's Guthrie. "They need the cash coming in, and if they were in a precarious position (before the blackout), they will be wiped out. There are going to be a lot that won't be back," he said.

Brayham said the blackout - which has not resulted in any health or crime problems - was a wake-up call that core business functions will inevitably migrate from the physical world to the online world.

"If you extend [the effects of the blackout] as a paradigm of what business is going to be like in five years, those [retail] businesses wouldn't exist anyway," said Brayham.

The loss of major urban electrical power grids was identified as a key threat to US cities in a report recently issued by the President's Commission on Critical Infrastructure Protection.

This story has been corrected. Mercury Energy is only one of many electricity suppliers in New Zealand.